Users, such as independent and corporate merchants, use various services to accept and process payments and other financial transactions. Merchants that fail to adopt popular payment services, or decide to operate on a “cash only” basis, may actually lose out on potential business because many potential consumers prefer to make purchases using credit, debit, ATM and gift cards, as well as other forms of non-cash payment. In fact, the ability to run a profitable business can hinge on a merchant's ability to accept as many forms of payment as possible.
However, due to the subscription and/or transaction costs associated with accepting each brand and type of payment service offered by various payment networks, some merchants will elect to only accept and process some small portion of the available services from a limited number or payment networks. For example, an independent online merchant may find the cost of accepting all of the payment services offered by Visa™, Mastercard™, American Express™, Discover™, and possibly other brands of payment services, prohibitively expensive. In addition to the direct costs and fees associated with subscribing to or using the various payment networks, there are additional incremental overhead costs associated with each additional payment network adopted by a merchant.
For example, each payment network or service can have separate and distinct compliance and operational requirements. Each payment network typically includes its own unique set of practices and procedures with which the merchant must comply in order to use that particular payment network. Currently, there is no standard communication protocol for interacting with payment networks. Accordingly, integrating and managing the requisite procedures and practices for each additional payment network a merchant uses adds additional operating costs in the form of additional head count or in the form of the merchant's or the merchant's employee's time.
Subscribing to multiple payment networks requires keeping up with different transaction request formats, interface standards, connectivity models, and reporting, settlement and reconciliation procedures required by each payment network. Managing the various requirements can easily overwhelm the capabilities and resources of some merchants and can cause merchants, especially smaller merchants, to limit the total number of payment networks to which they subscribe and, consequently, the number of payment forms they accept.
The potential expense and hardship of using multiple payment networks is further compounded by the fact that the various payment networks periodically publish business operation updates in which they change, add or otherwise augment the various compliance requirements. Each time any one of the payment networks changes requirements, merchants have to update their own internal procedures, systems, and protocols. Since each payment network publishes business operation updates on its own schedule, a merchant can end up constantly making internal updates as it makes changes to comply with the new requirements of each payment network as they are announced.
Some intermediary payment services, such as PayPal™, have emerged to help online merchants to accept a wider range of payment options while reducing the cost and complexity of accepting more forms of payment. However such intermediary payment services are less than ideal for attracting customers because they often require consumers to create accounts with the intermediary payment service and then register their preferred payment accounts before being able to make any purchases with a merchant. Because of the extra registration steps involved and the fact that typical intermediary payment services permanently store consumer payment account information, some consumers do not like or trust intermediary payment service providers and are reluctant to deal with online merchants that only accept payment through intermediary payment service providers. In addition, many intermediary payment service providers have had a difficult time addressing the needs of traditional brick-and-mortar merchants because most intermediary payment services require web-based transactions to work effectively.
Furthermore, when a merchant limits the number of payment networks it uses, it effectively limits the number and types of ancillary financial service to which it has access. For example, a merchant may choose to accept Visa™ and Mastercard™ credit cards to capture the largest share of potential cardholder sales, but may know that it would benefit from fraud and risk services offered by another payment network or third-party service provider to which it has no access. Currently, there is no way for a merchant, small or otherwise, to quickly and cost effectively customize the ancillary financial service it receives when they subscribe to a particular payment network. Merchants are effectively locked into the offerings of the payment networks they choose to use for accepting payments.
Embodiments of the present invention address these and other deficiencies.